Rasputin314

[QUOTE]Originally posted by Chris S
[B]John,

John David

For me... I seem to have magnetic wheels that attract nails and what nots... so I will continue to get the certificates.

No seriously though I visit a lot of construction sites and so maybe that is the reason why I acquire nails like I do. Either way, Discount Tire has given me two new tires when they were almost completely worn out because the puncture was not fixable.

I also had one tire that got a wood chip in it ... (they think it came from a wooden fence but I don't understand why they think that ) And Discount Tire replaced that tire for me too. So if I add in the latest one... DT has given me three SO2's!

Chris S

Nothing personal, Blake, but working sales at these places hardly qualifies you as an authority on extended warranties. Trust me, they work the numbers so they make boatloads of money on these things...just as my company does.

Unless a failure is going to cause severe financial pain, I'd suggest buying extended warranties only when:

Cost < Present Value (failure rate % * avg. cost of repair/replacement). The PV is important, b/c even if there's a 100% payout over time, the retailer still gets to invest your $ if/until a payout is made.


[QUOTE]Originally posted by infinitebass
[B]Hey Chris, you know not what you speak of. I've worked at both Best Buy and Circuit City for well over two years. And it is a rip off on somethings, but others, you're an idiot if you don't buy. And seeing as how I'm not selling anything to you, I wouldn't be lying about it.

There is much pressure for the sales person to sell them, and I do get more money for selling them, but I won't offer them if I feel they are not worth with, regardless.

BlueHS2000

yeah i just got it done today and they were fast but i didnt really pay attention to whether or not they patched it from the inside or whatever the way they should, but I hope so bc im in deep isht if they didnt. And whats nice is that they did it for free and they did a tire alignment for 8 bucks wow. not bad at least for me that is.

infinitebass

Actually, Chris, I do believe it does give me some sway. At least you should have singled out something other than Best Buy and Circuit City. I know the products they carry well. I know how they function, what breaks, what repairs cost, and how service plans work. I think that does at least makes me more of an authority than a knowledgable consumer. You know how much of that extended warranty they get to invest? Less than 40%. By law, the rest must go in an escrow type account till the warranty period has expired or that particular product needs to be repaired. I won't lie, they make money off of it. I'll agree with customers when they bring that up. But they don't just do it for the money, its to give the customer complete satisfaction. And neither Best Buy nor Circuit City sell extended warranties...only the manufacturer sells a true extended warranty...

Blake

Chris S

Blake,

I do cash flow management in the Treasury group of a major computer company, and tracking changes in warranty provisions is a pretty critical area of my job since it can represent sizable cash flow impacts. If I screw up in my knowledge of warranty accounting, it could cause a quarterly cash flow miss in the tens of millions of dollars...are you regurgitating your sales training (FWIW), or have you also done a stint in BB's &/or CC's treasury dept.?

While GAAP (not law) requires that a portion of extended warranty rev/profit be deferred and amortized over the contract life, the actual $ to the seller are not encumbered by any governmental regulatory provisions.

BTW, I didn't mean to single out BB or Circuit City, it's just that they came first to mind. I shop both places pretty regularly, so I'm certainly not critiical of the stores, just the ext. warranty pricing. Any chance you could get your current employer to quit sending me offers for extended warranty coverage on my satellite system that I bought several years ago? The coverage costs more that it's worth!!! They're also wasting a lot of printing and postage w/ their offers to cover my washer and dryer...

jschmidt

Hey, it's insurance. IMHO with this kind of small benefit insurance, (where you can manage the loss either way) is a satisfaction product, not risk management.

They wouldn't sell it if they didn't make money. You wouldn't buy it if it didn't provide satisfaction. It's the perceived value of the satisfaction (and the buyers collateral satisfaction at perceived good planning) that establishes the personal value of the product.
To an individual, it's the end user justification (sometimes determined by individual circumstance) that determines the value of the product.

I don't buy them for some of the reasons stated above but there's no right answer.

So here's another tire buying tip. When you are getting your tires mounted make a point of refusing valve stems. For one thing, they seem to last 50,000 miles easily. For another, I believe you'll always get new ones anyway because it is easier for the tire tech to rip them than bleed them. Then send me half the 10-12 dollars

infinitebass

I have to be somewhat right...I don't think I've ever had jschmidt agree even the slightest bit with anything I have ever said...

Blake

Chris S

Don't worry, you're not the only one!!!

infinitebass

I think we're both winners. He agreed with us both. Today's a happy day!

Blake